'Standards for Consumer Interest Infringement in Joint Projects of SME Cooperatives' Established... Law Enforced

Park Young-sun, Minister of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 21st that it has established and promulgated the "Standards for Consumer Interest Infringement in Joint Projects of Small and Medium Enterprise Cooperatives" in cooperation with the Fair Trade Commission.

This notice defines the scope following the enforcement of the "Small and Medium Enterprise Cooperatives Act" on the same day, which stipulates that the cartel regulations under the Fair Trade Act do not apply when joint projects carried out by small and medium enterprise cooperatives do not infringe on consumer interests.

In particular, by applying a negative regulation approach, the notice clearly stipulates that acts not listed in this notice do not infringe on consumer interests, significantly enhancing predictability regarding legality.

Additionally, it is stipulated that joint projects of small and medium enterprise cooperatives that determine prices, control members' production volumes, or restrict trading areas and trading partners are considered to infringe on consumer interests. Acts such as limiting members' facility investments, enforcing product specifications, and pre-deciding competitive factors during bidding are also included as consumer interest infringement acts to minimize consumer concerns.

On the other hand, when small and medium enterprise cooperatives jointly purchase raw materials or receive orders for goods or services on behalf of their members, the application of cartel regulations is excluded, which is expected to strengthen their bargaining power when dealing with large corporations. Previously, small and medium enterprise cooperatives were passive regarding prices set by suppliers during joint purchases, but now they can determine desired purchase prices and negotiate with suppliers based on that.

Park Young-sun, Minister of SMEs and Startups, said, "In the era of the 4th Industrial Revolution, the 'power of connection' is necessary, and through the revision of the Small and Medium Enterprise Cooperatives Act and its enforcement decree, as well as the establishment of this notice, an opportunity has been created to strengthen connections between companies." She added, "We will spare no administrative or financial support to promote various joint projects for inter-company connections."

This content was produced with the assistance of AI translation services.